Financial problems can lead to significant stress and is one of the leading causes of divorce in the United States. When debt collectors are calling at all hours or demanding letters are arriving in the mail, strain can appear in even the happiest of marriages. Add to the strain threats of wage garnishment, property liens and repossessions and it is easy to see why more couples divorce over money than for any other reason.
However, there are ways to deal with financial difficulty, and although it should be considered a last resort, discussing your options with bankruptcy attorneys could lead you to a fresh start and get you out from under your financial nightmare.
It is important to understand the different types of bankruptcy and other options that may be available before you make the decision to file.
We can help in many ways including:
If you have a steady income, but are finding yourself unable to pay your bills, you may be eligible to file Chapter 13 bankruptcy. In this type of bankruptcy, your priority debts, such as child support, alimony and tax obligations are paid first. Then, important bills like your mortgage or car loan are paid. If you are behind in either of those, the Chapter 13 bankruptcy trustee will try to work additional payments into your plan so that you can bring them current as well. Once all of those are paid, your remaining disposable income is used to pay your unsecured debts. Some creditors will not require you to pay anything while others will not require you to pay the full amount you owe. The payment plan lasts for between three and five years. You must show the trustee that all priority and important debts are up-to-date before your bankruptcy can be discharged.
If you have little or no income and do not own property, or own property with little equity available, Chapter 7 bankruptcy may be the best option for you. In Chapter 7 bankruptcy, a trustee may require some of your property be sold in order to pay your creditors, but if certain property is exempt from being sold under a bankruptcy proceeding, such as your home, clothing, furnishings, vehicle and Social Security payments.
Your car and tools of your trade may also be exempt. The process normally requires only one trip to the courthouse and is completed in between four to six months. In both types of bankruptcy, an automatic stay halts all collection proceedings, including wage attachments, property liens, repossessions or disconnection of utilities.
Rather than filing for bankruptcy, you may want to consider a modifying your mortgage loan. Real estate attorneys say that loan modification is a better option, especially if you are only behind on your mortgage payment.
A modification can stop foreclosure and let you keep your home by modifying one or more terms of the loan. The bank may agree to reduce interest rates, change the number of months or years you must pay or lower payments to a level you can afford.
If you are struggling financially and are looking for a way to stop the collection calls, contact our bankruptcy or real estate attorneys to see what options are available to you.